Mervyn King, the governor of the Bank of England, has put himself on a collision course with Downing Street over its plans for reducing the Treasury's "extraordinary" deficits once recession is over.

Appearing before MPs at the cross-party Treasury select committee this afternoon, King rejected the chancellor's tax and spending plans, laid out in his April budget, as too cautious, insisting that if the economy recovers as rapidly as Darling expects, the government must act more urgently to bring borrowing back down.

"We are confronted with a situation where the scale of deficits is truly extraordinary. This reflects the scale of the global downturn, but it also reflects the fact that we came into this crisis with fiscal policy on a path that wasn't sustainable and a correction was needed," he said.

It contradicts the government's argument that the rapid increase in government debt, which is expected to peak at almost 80% by 2014, is an unavoidable result of the global financial crisis.

Under Darling's forecasts, set out in the budget, it will take until 2013-14 to bring the government's current deficit – the difference between tax revenues and spending – down to 5.5% of national income. But King thinks the budget should be returned to balance faster.

"If the economy were to recover along the path assumed in the budget projections of GDP then I think the time over which deficits need to be reduced is likely to have to be faster than was implied by that projection," he said.

"There will certainly need to be a plan for the lifetime of the next parliament, contingent on the state of the economy, to show how those deficits will be brought down."

Without a credible action plan to bring the public finances back in line, he suggested the government could struggle to find buyers for its debts in the years ahead. "Although we are finding it easy now to finance those deficits by issuing gilts, there could be problems down the road. We need a credible statement of what will guide the deficit reduction," he told MPs.

The shadow chancellor, George Osborne, seized on King's remarks, saying today was "demolition day for Gordon Brown's tax and spending policies". As well as King's comments there was a grim prediction from respected thinktank the Organisation of Economic Co-operation and Development that Britain faces the biggest deficit in the developed world. Osborne said the Bank governor had "demolished for good any claim that this discredited government ever had to a credible plan for the recovery".

The governor's unusually blunt intervention broke the convention that the Bank does not comment on fiscal policy and will infuriate Gordon Brown, who has laid down the battle lines for the next election between a Labour government that will continue investing in public services, and "Tory cuts".

Instead, King's comments suggest a government of any party would be forced to tighten the purse strings to bring deficits under control.

He was flanked by fellow members of the Bank's Monetary Policy Committee, who gave an update on the health of the credit crunched economy. King said there were "genuine concerns about how quickly the recovery will pick up," highlighting the lack of lending from banks as a potential brake on growth.

Charlie Bean, the Bank's deputy governor, said there were some signs the downturn is past the worst, but doubts remain about when a recovery will materialise. "There is a considerable uncertainty about the strength of the upturn," he said.

Kate Barker, one of the MPC's independent members, said: "The jury is still out," on whether the housing market had hit bottom. There had been some signs of improvement, she said, "but I don't draw the conclusion that we are going to move to a period of strong growth."

The salvo from King was the latest evidence of a marked cooling in relations between Threadneedle Street and the government.

The governor made a controversial intervention in the run-up to the spring budget, suggesting the chancellor had little room to afford a fresh fiscal stimulus; but today's latest comments were a more direct repudiation of government policy.